The jobs market is starting to slow down amid fears of a possible “double dip” in employment, a new report warns.

The Recruitment and Employment Confederation (REC) said permanent and temporary staff placements increased at their weakest rates for around a year last month.

Pay rates offered to temporary and contract staff fell slightly in September for the first time this year, according to research among 400 recruitment firms.

REC chief executive Kevin Green said: “The jobs market is starting to flatline and may herald a double dip in employment. Whilst there is marginal growth, these figures are the worst we have seen for a year.

“The Government must do everything possible to avert the threat of increasing unemployment. This must include avoiding new regulation that could restrict businesses and jobs growth.

“How the Government decides to implement the Agency Workers Regulations will be its first major test in cutting red tape on business.

“Recent party conferences have underlined plans for welfare and benefits reform but this will take years to implement.

“Immediate priorities for Government must focus on encouraging private sector employers with incentives to take on staff and radically improving the support being offered to specific groups of jobseekers, such as those under 25.”